LEVEL, the recently-launched ‘next generation long haul’ brand from the International Airlines Group (IAG), parent of Aer Lingus, British Airways, Iberia and Vueling, is planning to grow its fleet from just two aircraft to 30 over its first five years of operation. The start-up launched operations on 01-Jun-2017 using two Airbus A330-200s flying from Barcelona to Buenos Aires, Argentina; Los Angeles and Oakland, USA; and Punta Cana, Dominican Republic.
Speaking during a conference session at the World Routes network development forum in LEVEL’s home city of Barcelona, Spain, Willie Walsh, chief executive officer, IAG confirmed an ambitious growth plan. Alongside the three additional A330-200s it has already committed to for 2018, he says the operation will grow to 13 aircraft in 2019 and up to 30 aircraft by 2022. These could consist of both single-aisle and twin-aisle aircraft, but will all serve long-haul destinations. “I would be amazed if LEVEL isn’t using the A321neoLR,” he noted.
The three widebody aircraft arriving for next summer will likely support the airline’s expansion into a second home market in 2018, with both Paris Orly and Rome Fiumicino under consideration. Like Barcelona El Prat, both have a strong Vueling short haul network to provide future feed into the long haul operations, an important flow when LEVEL looks to grow frequencies.
“We have three aircraft on the way. We might look at expanding our presence in Barcelona but the two principal European cities we’ve looked at are Rome and Paris,” confirmed Mr Walsh. “We will make a decision in the next couple of months.”
“We do prefer one over the other,” he added, but noted that growth from Barcelona could also be on the cards. “At least two aircraft will be used, maybe three, but possibly we could also grow Barcelona from two to three based aircraft too.” Alongside routes to the west, he also confirmed that eastbound markets could also form part of the LEVEL network and highlighted Barcelona – Tokyo as one example. “This is a market we will look at,” he said, “but it can be a little more complicated”.
While Mr Walsh noted “low cost long haul might not dominate the market,” and that Norwegian may be growing, but its “financial performance is not where they would want it to be,” he said he is “convinced there’s a profitable business there.” In fact, he confirmed LEVEL will be profitable during its first year of operation, a significant for a start-up that wasn’t even launched at the start of 2017. The IAG strategy group had been studying the emergence of the low cost long haul market for the past three years, but it was only in Mar-2017 that the final go ahead for the venture was announced.
“We debated if we could stretch our existing brands to support this model,” confirmed Mr Walsh, “but in the end we created LEVEL. Having acknowledged no involvement in the brand’s name selection (“When I saw it first I thought Jesus Christ!”), he has subsequently warmed to the name and now regularly uses it general conversation. “We’ve been positively surprised at every level with LEVEL,” one example of many mentions during the 50 minute interview with aviation analyst, John Strickland of JLS Consulting.
Despite three years of planning the launch of a new brand (LEVEL currently piggybacks on the Iberia’s air operator certificate, flies two former Iberia A330s and crewed by pilots and cabin staff from within the IAG Group) was a risk to its own business. “We saw an opportunity and was keen to get the airline airborne as soon as possible. We first planned summer 2018, but had two available A330-200s and thought let’s start early. We assumed some level of cannibalisation of our existing traffic, especially with Iberia via Madrid but haven’t seen it. This is a whole new customer base for IAG,” Mr Walsh explained.
In time LEVEL will be a standalone business and have its own air operator’s certificate and team, but for now it is being managed from within the IAG management structure. “You could say we took cost control to an extreme; we don’t even have a CEO and we’re using Iberia aircraft and cabin crew. It’s a fresh approach to the business,” added Mr Walsh.